22 March 2004

United Nations Working Group Makes Recommendations on Draft of E-Commerce Convention

NEW YORK, 19 March (UN Headquarters) -- A United Nations working group drafting a convention to facilitate global electronic commerce came closer to its goal at a one-week meeting that concluded today at United Nations Headquarters.

The Working Group on Electronic Commerce of the United Nations Commission on International Trade Law (UNCITRAL) adopted recommendations on a draft text of a legal instrument intended to facilitate e-commerce by removing current barriers.  The conclusions of the Working Group will be submitted to the next session of the Commission, to be held at United Nations Headquarters from 14 June to 2 July.

“This work will benefit world trade, as it will enable and encourage the greater use of e-commerce”, said the Working Group Chairman, Jeffrey Chan of Singapore.  More and more trade transactions are being conducted through electronic means, and the Internet in particular has grown to be a powerful tool for business, Mr. Chan said.  “The problem is that, in international business, different countries have different legal rules for contracts.  This creates uncertainty when the same transaction is conducted across international borders.”  Often companies must hire lawyers in different countries to advise them, and this is costly, Mr. Chan said.

“The convention tries to create a uniform legal regime for such transactions”, Mr. Chan said.  “This would generate confidence in e-commerce and reduce costs.  E-commerce would be greatly encouraged.  With this, there can be an expansion of international trading transactions.”

The convention focuses on areas such as legal electronic transactions, data exchanges and e-mail messages, and as technology is moving fast will be “as technology-neutral as possible”, Mr. Chan said.

Jonas Astrup, who attended the meeting for the International Chamber of Commerce (ICC), said his organization favours the alternative of self-regulation by industry.  The ICC is addressing the contractual questions of e-commerce by developing the “e-Terms 2004”, voluntary rules to help companies negotiate contracts electronically, Mr. Astrup said.

On the other hand, “the draft convention has very useful aspects, such as recognition of data messages, and is in synergy with our tools”, such as contract guidance and model clauses, Mr. Astrup said.  The ICC set up a task force that, in 2003, submitted comments on the scope and purposes of the draft convention.

The UNCITRAL’s Working Group on Electronic Commerce started work on the draft instrument in 2000, by tackling selected issues related to electronic contracting, such as legal barriers in existing trade-related instruments to the expansion of e-commerce, as well as issues related to transfer of rights, in particular rights in tangible goods, by electronic means and mechanisms for publicizing and keeping a record of acts of transfer on the creation of security interests in such goods.

Work on the 16-article draft, entitled “Preliminary draft convention on international contracts concluded or evidenced by data messages”, has focused on issues such as location of the parties (articles 7 and 14), contract formation and legal recognition of data messages (articles 8-13), availability of contract terms (article 15) and the sphere of application of the convention (articles 2-4).

The Working Group is composed of all UNCITRAL member States -- Austria, Benin, Brazil, Burkina Faso, Cameroon, Canada, China, Colombia, Fiji, France, Germany, Honduras, Hungary, India, Iran, Italy, Japan, Kenya, Lithuania, Mexico, Morocco, Paraguay, Romania, Russian Federation, Rwanda, Sierra Leone, Singapore, Spain, Sudan, Sweden, Thailand, the former Yugoslav Republic of Macedonia, Uganda, United Kingdom, United States and Uruguay (alternating annually with Argentina).

Several other countries that are not members of the Working Group participated as observers to the meeting, which was held at the United Nations from 15 to 19 March.  Also attending were representatives of the European Commission, the American Bar Association, the World Bank, the World Intellectual Property Organization (WIPO) and other bodies.

The UNCITRAL, the core legal body of the United Nations system in the field of international trade law, works to modernize and harmonize the rules of international business.  As trade means faster growth, higher living standards, and new opportunities through commerce, UNCITRAL seeks to increase these opportunities worldwide by formulating modern, fair, and harmonized rules on commercial transactions.  These include:

-- Conventions, model laws and rules which are acceptable worldwide;
-- Legal and legislative guides and recommendations of great practical value;
-- Updated information on case law and enactments of uniform commercial law;
-- Technical assistance in law reform projects; and
-- Regional and national seminars on uniform commercial law.

The Secretariat of UNCITRAL is the International Trade Law Branch of the United Nations Office of Legal Affairs, located at Vienna.

For information, please contact Edoardo Bellando at the United Nations Department of Public Information, tel.: (212) 963 8275, e-mail:; or visit the UNCITRAL Web site at

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